Slot allocation at Community airports Infrastructures and Airports

Slot allocation at Community airports Infrastructures and Airports Unit Klaas Pel European Commission

European Commission 2

Content • Evaluation of the slots Regulation • Commercial slot allocation mechanisms: – Problem definition – Commission objectives – Policy options • Next steps European Commission 3

Evaluation of slots Regulation (1) • Regulation (EC) 793/2004 amending Regulation (EEC) 95/93 • Technical improvements of Regulation (EEC) 95/93 • Review 3 years after entry into force • Focus stakeholder consultation on market access and enforcement elements • New entrants: – Reinforcement of definition so air carriers can establish a viable network and competitive critical mass of operations European Commission 4

Evaluation of slots Regulation (2) • Enforcement: – Maintaining the integrity of the slot allocation system – Introduction of sanctions and measures to prevent slot abuse • Role and position of slot coordinator: – Increased responsibilities and authority to deal with slot abuse – Unquestionable neutrality and independence • Process of slot allocation: – Better use of existing capacity whilst maintaining compatibility with IATA scheduling guidelines European Commission 5

Commercial slot allocation mechanisms • Ongoing assessment of introduction of commercial slot allocation mechanisms • Primary allocation: – Higher posted prices – Auctioning of newly created slots – Withdrawal of proportion of slots • Secondary trading European Commission 6

Problem definition (1) • Of the 35 busiest EU airports, 6 are heavily congested, 10 partially congested and 19 uncongested • Trends at congested airports: – – Commercial flights replace general aviation and ad hoc flights scheduled pax flight replace cargo and charter Average aircraft size increases Average flight distance increases • Expected aggregate yearly growth in slot demand at major EU airports 3. 1% between 2005 -2025 • By 2025 up to 14 EU airports likely to be saturated for 8 -10 hours a day and more than 40 airports unable to handle typical peak hours • By 2025 Europe will need an additional 6 major airports and 9 medium sized airports European Commission 7

Problem definition (2) • New entry at congested airports difficult due to lack of slots or creation of additional capacity • Airlines not confronted with full opportunity costs of slots they hold • Slots perhaps not allocated in a way that best reflects underlying demand • Under current regime little incentive for airline to trade slots with airline that values the slot more highly to utilise it • Under Regulation only exchanges permitted • Need for clear legal basis to ensure slot transfers take place in a nondiscriminatory and transparent way European Commission 8

Commission objectives • • Overall objective: optimal and economically most efficient use of slots at coordinated Community airports, while maximising potential for competition Specific targets: 1. 2. 3. 4. To ensure more economically efficient use of the available slots To strengthen competition at Community airports To match secondary trading with overall EU air transport policy To maintain compatibility with world-wide procedures European Commission 9

Policy options • • Status quo/ non-regulatory option Secondary trading in combination with primary trading mechanisms Secondary trading with tailored competition law measures European Commission 10

Next steps • Evaluation of application of Regulation (EC) 793/2004 • Stakeholder hearing on commercial slot allocation mechanisms and on application of Regulation (EC) 793/2004 • Proposal for amendment of slots Regulation • Impact assessment • Adoption proposal for new legislation European Commission 11